Name and Location
Department of Energy (DoE) peaker projects, South Africa.

Client
DoE.

Project Description
The project involves the construction of two greenfield open-cycle gas turbine (OCGT) power plants of 335 MW (Dedisa) and 670 MW (Avon), in the Eastern Cape and KwaZulu-Natal respectively, with a combined capacity of 1 005 MW.

Each facility will also have on-site fuel and water storage for a continuous 45-hours of full-load operations.

Value
The total investment cost for the two plants is about €780-million.

Duration
Commercial operation is expected to start at Dedisa in 2015 and at Avon in 2016.

Latest Developments
Construction has started on the DoE’s peaker power projects, with Investec Corporate and Institutional Banking confirming that the OCGT plants have reached financial closure.

The build, own and operate package was awarded by the DoE to a consortium led by international energy group GDF SUEZ. Investec acted as the coordinating mandated lead arranger and sole documentation bank providing senior debt facilities in a syndicate of six financial institutions.

The turnkey engineering, procurement and construction contractors are Ansaldo Energia and Fata, of Italy.

Ansaldo Energia will supply six AE94.2 gas turbines – four for Avon and two for Dedisa – complete with the relative generators and auxiliary systems. The company will also supply the civil works, in addition to transport and the erection and commissioning work for its share of the supply.

Fata will supply mechanical and electric plants in the framework of the overall order, working through the EPC Power division and the South African branch of the company. The contract also covers the construction of the substation and the interface with the electric grid, fuel storage and distribution, as well as water treatment. 

South African engineering company Merz and McLellan, a wholly owned subsidiary of the Mott MacDonald Group, has been appointed as the owner’s engineer for the two peaking power projects.

The company will carry out engineering and construction monitoring services at the Avon and Dedisa plants.

Key Contracts and Suppliers
GDF SUEZ consortium, comprising GDF SUEZ (38%), Legend Power Solutions (27%), of South Africa; Mitsui & Company (25%), of Japan; and The Peaker Trust (10%), representing black economic-empowerment and community interests (build, own and operate contract); Ansaldo Energia and Fata (turnkey engineering, procurement and construction); and Merz and McLellan (owner’s engineer).

On Budget and on Time?
The peaker projects have been subjected to several delays, with the DoE having initially selected an AES-led consortium as the preferred bidder, before terminating talks in April 2008. Negotiations were subsequently launched with the GDF SUEZ-led consortium.

The DoE eventually awarded the contract to a consortium comprising GDF SUEZ (38%); Legend Power Solutions (27%), of South Africa; Mitsui (25%), of Japan; and The Peaker Trust (10%), representing black economic-empowerment and community interests.

In June, the consortium signed 15-year power purchase agreements with Eskom.

Contact Details for Project Information
DoE spokesperson, Thandiwe Maimane, tel +27 12 406 7470, fax +27 86 615 6949 or email MediaDesk@energy.gov.za
GDF Suez, tel +33 1 44 22 66 29 or email ir@gdfsuez.com.
Ansaldo Energia, tel + 39 010 6551 or fax + 39 010 6553411.
Fata, tel +39 011 96681 or fax +39 011 9672 673.
Merz and McLellan, Jo Reeves, cell + 27 76 984 4485